STRATEGIC ANALYSIS AND STRATEGY DEVELOPMENT

Strategic Analysis And Strategy Development Of Non-UK Company

Strategic Analysis And Strategy Development Of Non-UK Company

Introduction

At the simplest level a business may become a multinational organisation just by replicating itself in a number of different countries. Such a strategy would provide some of the advantages of operating at an international level. However, in just duplicating the organisation time after time, a chain of independent country-located businesses would be created with limited synergy between the replicated operating businesses. In such a situation, increasing business size will not lead to significantly increased complexity in the overall organisation. Many multinational companies reject this approach and seek to create and extend their competitive advantage through the internationalisation of their operations. In order to create synergy, cost savings, market knowledge or technology links between business units in different locations (or nations) managers have to reject the independent replica approach and develop linkages between the elements of the international business (Bartlett and Ghoshal, 1989, 1991).

The growth of multinational companies does not just reflect a new mode of thinking for senior managers but is driven by the economic climate these businesses operate in. By spreading its activities and operations to an international scale, a multinational organisation hopes to find competitive advantage. The sheer size and diversity of the larger multinational companies combined with their search for competitive advantage means they are extremely complex organisations. How successfully an international business manages this complexity is likely to have a significant effect on its competitiveness. This has attracted much attention from both academics and industrialists (Boyacigiller, 1990; Doyle, 1990).

Strategic analysis and strategy development of non-UK company

Ciba-Geigy was a multinational organisation with worldwide operations, and with dedicated production facilities in Scotland, UK. The purpose of this paper is to use a number of tools and models to examine the nature of interactions in one part of this multinational. By using a range of models, it is hoped that a more rounded and deeper appreciation may be gained. In addition to learning something about Ciba-Geigy, it may be that the application of a range of models will highlight some of the strengths, weaknesses and possible conflicts or synergies between the different models.

In 1758 J.R. Geigy, the oldest chemicals company in Basle, Switzerland, began trading in chemicals and dyes. In 1971, Geigy merged with Ciba, a Basle-based chemicals company founded in 1884, to form Ciba-Geigy. Later known simply as Ciba, it is an international group having diverse business operations with headquarters in Switzerland. Ciba had sales of CHF 21 billion, or approximately US$17 billion, in 1995.

The business has three major divisions: health care (38 percent of sales, 31,000 employees), followed by industrial (37 percent, 27,500), then agriculture (25 percent, 13,500). The industrial division is further segmented into seven strategic business units (SBUs): textile dyes, chemicals, additives, pigments, polymers, composites, and Mettler Toledo. Many of these are international businesses in their own right. Within the Pigments SBU (annual turnover approximately US$700 million) there are three different businesses: high performance pigments based ...